STRATEGIC PLAN

Transcription

1 EDMONTON INTERNATIONAL AIRPORT STRATEGIC PLAN

2 STRATEGIC PLAN TABLE OF CONTENTS OUR STRATEGY FOUNDATIONS...4 Strategic Drivers...4 Planning Perspectives....5 OPERATIONS...5 LEARNING AND GROWTH...6 FINANCIAL...6 COMMUNITY...6 OUR PLANNING CONTEXT...7 Planning Indicators...7 THE GLOBAL VIEW....7 CLOSER TO HOME....8 Strategic Risks....9 ENERGY/OIL PRICES...9 COMMUNITY...10 GENERAL/BUSINESS AVIATION OUR STRATEGY...11 Introduction...11 Focusing on Our Passengers...11 BUILDING REGIONAL AIR TRAVEL...12 ATTRACTING INTERNATIONAL TRAVELLERS...12 ENHANCING PASSENGER EXPERIENCE Serving Our Community...14 Developing Non-Aeronautical Initiatives...15 PARKING...15 CONCESSIONS REAL ESTATE Managing Our Finances...16 Investing in Our People...16 VILLENEUVE AIRPORT

3 OUR STRATEGY FOUNDATIONS Strategic Drivers Our strategy is driven by our mission and vision, and focuses on delivering our major overarching goal while honouring and respecting our core values. Together, these are the foundations of our overall strategy. EDMONTON INTERNATIONAL AIRPORT

4 STRATEGIC PLAN Planning Perspectives Our strategy positions us for long-term success and creates future value by investing in passenger relationships, operations, learning and growth opportunities, financial stewardship and community sustainability. We seek to take a balanced approach, ensuring that all aspects of our business are considered in planning our operations. Therefore, as part of our strategic planning process, we set objectives to deliver excellence across these five key success factors: Passenger Relationships Operations Learning and Growth Financial Stewardship Community Enhance passenger experience Enhance airline productivity Be accountable for exceptional leadership Achieve financial sustainability Achieve social and environmental sustainability PASSENGER The passenger perspective covers objectives such as customer satisfaction, passenger volumes as well as product and service attributes leading to passenger experience. This is a critical factor in differentiating EIA from other travel options and in creating preference and affinity. We will support this by placing passengers at the heart of business model, developing products and services that meet their needs and exceed their expectations and providing core aviation services that effectively link them to the business and leisure destinations of their choice. OPERATIONS The process perspective considers operational goals and outlines the key airport-wide processes necessary to deliver the passenger objectives. Our core operational processes are essential to the provision of our basic foundational product aviation services and their quality and reliability are essential to our success. We will assure effective processes by creating standards and measures in key performance indicators for operational excellence, such as on-time departure, security wait times and efficiency, operational downtime averages, and safety and security performance. 5

5 LEARNING AND GROWTH The learning and growth perspective covers the intangible drivers of future success such as human capital, organizational capital and information capital, including skills, training, organizational culture, leadership, systems and databases. People and culture enable strategy. We are committed to shifting to a cohesive work environment where our exceptional employee experience enables our people to perform at their absolute best. We will achieve this by improving work design, clarifying accountabilities, developing talent, leading exceptionally, integrating the way we work and enhancing employee experience. FINANCIAL The financial perspective covers the financial objectives of an organization and allows managers to track financial success and stakeholder value. We are committed to responsible and sustainable financial management which is a critical factor in creating the stability needed for successful long-term planning. COMMUNITY The community perspective considers the key parameters necessary for the organization to operate effectively and responsibly in the context of its neighbours, its partners, its stakeholders and its environment. EIA s successful operations depend on a legitimate social license from the communities it serves. To address this perspective, we must responsibly manage our resources to advance our region s environmental stewardship, social well-being and economic prosperity. We will address this perspective by building skill in sustainability best practices, increasing transparency in reporting and monitoring, engaging stakeholders to ensure operations reflect their needs, and ensuring that operations reflect our core values. EDMONTON INTERNATIONAL AIRPORT

6 STRATEGIC PLAN OUR PLANNING CONTEXT Planning Indicators Edmonton Airports (EA) operates within a global context and is affected by a wide range of local and global economic, political and social drivers. The Edmonton region enters 2014 with a generally positive outlook at home and a very mixed picture overseas. This section provides an overview of the operating context that influences EA s strategic and financial targets for the next six years. The overall external environment supports the organization s growth ambitions. Global economic activity is recovering and Alberta remains one of the most attractive markets for investment with nearly $200 billion in major capital projects currently planned or under development. The vast majority of these projects are based in Northern Alberta. A strong regional economy continues to attract people to the Edmonton region, with Edmonton metro population growing by four per cent from August 2012 to August Canada s two major air carriers have plans to expand their fleets, with Air Canada adding 787s to the international markets and redeploying some of its older aircraft to its new discount carrier, Rouge. As Rouge continues to grow, it will add new, lower cost service to a wide range of leisure destinations. WestJet also continues to have ambitious growth plans. The airline recently announced plans to purchase 65 Boeing 737 MAX aircraft, giving the airline the flexibility of a 120-to-162-strong 737 fleet in ten years time. In addition, the continued roll-out of WestJet s new regional subsidiary Encore will allow the airline to connect smaller communities with larger centres such as Edmonton. THE GLOBAL VIEW The global economy continues its slow and uneven recovery from the 2008 Global Financial Crisis. In July 2013, the International Monetary Fund downgraded its global GDP forecast for the fifth time since It is currently projecting growth of 3.1 per cent in 2013 and 3.8 per cent in This recent downgrade reflects disappointing growth in the US economy, a deeper than expected recession in the Eurozone, and slower than expected growth in the BRIC economies and other emerging markets. The most recent IMF report indicates that downside risks continue to dominate the global economy. In addition to longstanding risks, such as weak sovereign balance sheets, depressed real estate markets, increasing commodity prices and geopolitical uncertainty (especially in the Middle East), new risks have emerged, notably the possibility of a prolonged slowdown of economic growth in emerging market economies. While the most recent manufacturing data in China has soothed some fears of a hard landing for the world s second-largest economy (as some leading economists have been predicting), continued slower growth is projected in China, India and other key emerging markets. Summer 2013 also saw increased volatility in the global financial market. Volatility in long-term interest rates and financial markets has affected advanced economies, while sovereign spreads have widened in parts of the Eurozone. Emerging markets have been adversely affected by interest rate spikes in advanced economies, asset price volatility and weakening domestic activities. Nevertheless, global inflation pressure remains generally under control. 7

7 CLOSER TO HOME Canada returned to solid economic footing in Canada has seen a solid net trade gain emerge in 2013 as a result of export growth outpacing import growth, bolstered by solid demand for cars, houses and industrial machinery south of the border. In addition, a depreciated Canadian dollar relative to the US dollar has helped render Canadian exports more competitive. At the same time, household debt continues to climb to record levels in Canada, making the economy more vulnerable to even a modest weakening of growth and increasing interest rates. Alberta continues to be Canada s best performing economy, and is projected to remain so for the foreseeable future. Construction is expected to continue as a primary driver of growth for Alberta, with output expected to increase by 5.3 per cent in 2013 and by 5.7 per cent in Major oil sand projects continue to develop with new companies set to begin producing oil in the coming years. Employment growth remains strong, with an estimated 46,000 new jobs to be created in 2013, while solid disposable income growth will continue to foster retail business. On the negative side, natural gas prices remain weak while pipeline capacity constraints and labour shortages threaten to stymie future growth. The Edmonton region s economic picture remains rosy, with the city expected to grow faster than most other metropolitan centres in Oil sands development continues to boost output in the natural resource and manufacturing sectors, which are expected to grow at rates of 6.7 and 4.4 per cent respectively in Edmonton s construction sector continues to build on impressive post-recession growth of 14.2 per cent in , with numerous major projects set to break ground within the next few years, including the new Oilers arena, the new Royal Alberta Museum and a new head office for Stantec The goods sector looks to outpace the service sector in the Edmonton region. Edmonton s commercial real estate market continues to experience a healthy balance of supply and demand, with an 8.7 per cent vacancy rate, while the city s housing market remains strong. The latest national income statistics indicate that Edmonton enjoys the country s third-highest median income. Levels of disposable income are expected to accelerate over the next two years, supporting strong consumer spending. Conversely, projected labour shortages and rising labour costs threaten to hinder continued growth, as do anticipated rises in material costs. REAL GDP 2011A 2012A 2013F 2014F 2015F 2016F 2017F Global* 4.0% 3.1% 3.1% 3.8% 3.8% 3.8% 3.8% 4.5% United States* 1.6% 2.2% 1.9% 3.0% 3.6% 3.4% 3.3% 2.9% Canada** 2.6% 1.7% 1.7% 2.2% 2.6% 2.3% 2.1% 2.1% Alberta** 5.3% 3.5% 2.9% 3.3% 3.0% 2.3% 2.2% 2.2% Edmonton** 6.9% 5.1% 3.6% 3.4% 3.2% 2.9% 2.7% 2.7% * IMF World Economic Outlook April 2013 & Update 2013 ** Conference Board of Canada 2013 Spring *** Boeing s Current Market Outlook 2013 WTI CRUDE OIL PRICE 2012A 2013F 2014F 2015F 2016F 2017F 2018F US DOE Base* US DOE High* N/A US DOE Low* N/A NYMEX Futures (Sept11, :52) N/A * US Department of Energy Annual Energy Outlook April 2013(2011 $s) EDMONTON INTERNATIONAL AIRPORT

8 STRATEGIC PLAN CPI 2012A 2013F 2014F 2015F 2016F 2017F Canada* 1.5% 1.6% 2.2% 2.1% 2.0% 2.0% 2.0% Alberta* 1.1% 1.8% 2.2% 2.1% 2.1% 2.1% 2.0% Edmonton* 1.2% 1.9% 2.2% 2.1% 2.1% 2.1% 2.0% UNEMPLOYMENT 2012A 2013F 2014F 2015F 2016F 2017F Canada* 7.3% 7.1% 6.6% 6.1% 5.8% 5.7% 5.6% Alberta* 4.6% 4.4% 4.4% 4.2% 4.0% 3.8% 3.7% Edmonton* 4.7% 4.6% 4.5% 4.3% 4.1% 4.0% 3.8% * Conference Board of Canada Metro Outlook Spring 2013 RETAIL SALES 2012A 2013F 2014F 2015F 2016F 2017F Canada* 2.6% 3.4% 4.1% 3.6% 3.3% 3.0% 3.0% Alberta* 7.8% 6.3% 5.4% 4.8% 4.3% 4.2% 4.0% Edmonton* 7.1% 6.5% 4.8% 4.2% 3.9% 3.6% 3.6% * Conference Board of Canada Metro Outlook spring 2013 Strategic Risks ENERGY/OIL PRICES Edmonton Airports and the Edmonton region are closely tied to the Alberta energy sector development of the oil sands and northern mining and minerals. Changes in energy prices may have both positive and negative impacts on our plan assumptions. Traditionally, when energy prices increase at a slow and stable pace, driven by world economic growth, the region and the airport see the benefits of a strong local economy and passenger growth exceeds average levels. The benefits of this growth are partially offset by increased airline costs (fuel is their largest expense), which result in higher ticket prices and/ or fuel surcharges. Conversely, lower energy prices are good for airlines, but as the price of oil approaches $70/barrel, activity in the Alberta oil sands tends to slow with new projects often being put on hold. This can reduce passenger and cargo demand. Sharp price spikes, driven by factors outside of supply and demand, as was seen in late 2008, tend to have a short-term positive impact on airport activity. This positive impact, however, is short lived as the higher energy prices lead to lower global economic activity and decreases in airline profitability. For the industry as a whole, slow, stable growth in the price of oil represents the optimal balance between economic growth and affordable fuel for airlines, with the $100/ barrel mark considered to be the sweet spot by many industry experts. 9

9 COMMUNITY The activities of Edmonton Airports have a significant impact on the local communities. Air service connects the region with the world and supports economic growth, jobs, trade and tourism. Edmonton Airports needs to remain actively engaged with community to ensure its growth plans are aligned with, and supported by, its neighbours. Over the course of the plan we will need to build the case and broaden community support for development of a third runway. We will also need to outline the organization s positions and desired outcomes vis-à-vis the City of Edmonton s proposed annexation of the airport lands and adjacent areas; and address concerns regarding perceived competition between the airport and local developers for non-aeronautical land use. GENERAL/BUSINESS AVIATION EIA has experienced strong growth in the general/business aviation sector over the last several years and this growth is expected to continue for at least the next two or three years. The majority of the growth in this sector is directly related to crew change activity of companies operating in the oil sands and northern Canadian diamond mines. There are concerns that once the current cycle of oil sands projects is complete new investments in this area may be limited. These concerns are tied to lack of pipeline capacity to get product out of Alberta and to increased US domestic oil production, which is reducing demand for Canadian energy. A significant decrease in this activity would negatively impact revenue projections in this plan and reduce utilization of past and planned capital investments geared towards this sector. EDMONTON INTERNATIONAL AIRPORT

10 STRATEGIC PLAN OUR STRATEGY Introduction Edmonton Airports mission is to drive our region s economic prosperity through aviation and commercial development. Our vision is simple: more flights to more places. As a not-for-profit organization operating in the public interest, our operations reflect our core values, ensuring that our business position is both strong in the present and sustainable in the future. Therefore, our strategic plan considers both what we do, and how we do it -- how we operate, how we learn and how we interact with others. We rely on short, medium and long-term plans to fulfill our mission and to realize our vision in a purposeful way. Our long-term intentions are captured in the 2010 Master Plan, whose 25-year outlook is the framework that shapes all development activity. This master plan is executed through five to seven-year strategic plans. These strategic plans together provide medium-term direction and maintain momentum towards larger goals, whose combined time span offers flexibility in responding to changes in our operating context. Our short-term intentions are identified in our annual business plan, a tactical outline of the deliverables that will move our organization towards its larger goals. Our strategy process includes a review of our performance, our environment and our operating context. The resulting information helps to shape a strategic plan that leverages our strengths to best capitalize on emerging opportunities. At the same, we assess weaknesses and consider threats to effectively identify and mitigate risks and develop contingencies. The scope of this Strategic Plan includes our operations at Edmonton International Airport (EIA) within the framework of Edmonton Airports larger management portfolio, which includes both EIA and Villeneuve Airport. This plan does touch on Villeneuve Airport and its expanding role, as identified in the 2013 Strategic Plan and the 2006 Villeneuve Master Plan. Overall, our strategy is intended to ensure effective, flexible and resilient processes as we move forward, using a cycle of continuous self-assessment, course correction and short and medium-term milestones over the course of our long-term plan. Focusing on Our Passengers As our primary customers, passengers are the strongest influencers of airport success. The more passenger demand we have, the more opportunity we have to deliver our vision of more flights to more places. Our recent expansion has significantly increased our capacity for growth. With the last few expansion initiatives near completion, our strategy is shifting from creating capacity to capitalizing on the opportunities that this new capacity offers. With this in mind, we are now focussed on attracting and retaining a growing number of passengers. We have set the goal of reaching 10 million passengers per year by This target represents an accelerated timeline for filling the building to the capacity of our recent expansion, while also emphasizing our focus on the passenger. This goal is ambitious, and achieving it will require significant effort. Nevertheless, we believe that this milestone is not only achievable but also has the power to inspire us and our many partners to greater accomplishment in the name of regional economic prosperity. Since 2004, EIA s total number of non-stop destinations has grown from 44 to 61 year-round and seasonal 11

11 destinations as of March Over the same ten-year period, passenger volume has grown by over 70 per cent, from 4.1 million to 7 million in However, this demand for air service at EIA continues to be primarily driven by Edmontonians travelling elsewhere. Only 33 per cent of passengers originating or ending their trip at EIA are non-residents, and just 7 per cent are non-residents from outside Canada. We intend to maximize our success in attracting more passengers by growing the percentage of non-resident demand for air service. Our key passenger market development strategies will focus on driving inbound passenger demand on existing and new routes over the next seven years. The regional hub and the international inbound strategy, together with improvements in passenger experience will drive us to meet our ambition 10 million passenger goal. BUILDING REGIONAL AIR TRAVEL Edmonton has significant opportunities to serve potential connecting passengers originating on flights from regional centres. With a history as the Gateway to the North, Edmonton has long been an important hub for flights to Yellowknife, and onwards to Canada s Western Arctic. Edmonton s role as the main staging point for Alberta s oil sands and for the resource sector in general makes EIA an obvious choice of a gateway to Fort McMurray and elsewhere. As the nearest major metropolitan air hub to Grande Prairie and the Peace Country, EIA is also a potential enabler for the southbound passengers flying in from this fastgrowing region. Inbound passengers connecting from Regina and Saskatoon also benefit from EIA s growing selection of non-stop flights and improved amenities. Our regional hub strategy will focus on marketing our airport as a unique and hospitable experience for connecting passengers. We will develop strong relationships with key audiences, engage key business partners, and strengthen our brand experience to expand and retain our passenger base. This will result in increased demand from non-resident visitors, which will result in new opportunities to acquire additional air services. Supported by growing passenger demand, we will also continue to work with airlines and encourage them to add new flights to Edmonton. The increased passenger numbers created by the regional hub strategy will also help to feed the demand needed to support international flights. ATTRACTING INTERNATIONAL TRAVELLERS Edmonton s basic business fundamentals position us as one of Canada s economic powerhouses. With the highest real GDP growth rate among Canada s major metropolitan centres (estimated at 5.1 per cent in 2012), the city also enjoys one of Canada s lowest unemployment rates at 4.4 per cent. With 97 per cent of Alberta s oil reserves within the city s servicing area, Edmonton is also a force in sectors such as construction, engineering, nanotechnology, waste management, medical research, pharmaceuticals, food production and education. The city is poised for long-term economic growth, with $184.5 billion in planned commercial and infrastructure investments, including a new downtown arena, a new northern residential-commercial core and an expanded rapid transit system. With expanded global trade, exchange, and travel, matched with the economic opportunity driven through our region and from our catchment areas in the province and in the Prairies, EIA will align its international strategies to ensure we remain an enabler of continued growth. In addition, although its product is less mature than primary global competitors, Edmonton has much to offer as an inbound tourist destination, including the city s abundance of summer festivals, its extensive River Valley park EDMONTON INTERNATIONAL AIRPORT

12 STRATEGIC PLAN system, the largest shopping centre in the western world, and well-known professional sports teams. It is also a natural hub for eco-tourists headed to Jasper National Park and the Canadian North. Edmonton is a comparatively welcoming place for tourists -- nearly one in five Edmontonians are immigrants, about one in 10 speaks a non-official language, and the city as whole embraces multiculturalism with 350,000 people flocking each year to the city s annual Heritage Festival. Nevertheless, increasing international inbound demand for flights to Edmonton is a complex undertaking. While competing centres such as Calgary, Vancouver and Toronto have gained immense profile by hosting major international events such as Olympic Games and World Fairs, Edmonton remains something of a well-kept secret. In addition, Canadian carriers hub strategies will continue to drive traffic through the above markets. Our strategy for growing international inbound passenger travel includes strengthening engagement with key strategic partners such as industry, provincial and federal offices located in international target markets, Edmonton Tourism, Travel Alberta, Edmonton Economic Development Corporation (EEDC) and post secondary institutions in coordinated outreach efforts to improve awareness and drive traffic to Edmonton and the Prairies via EIA. ENHANCING PASSENGER EXPERIENCE Delivering an exceptional passenger experience through operational excellence is a key component in EIA s plan to reach its goal of 10 million passengers a year by When the delivery of airport products and services exceeds passenger expectations, we create preference among passengers, which will be a key driver in supporting our regional hub strategy. EIA is already a strong performer when it comes to passenger experience. Expansion 2012 has delivered a new, modern, world-class terminal. This tremendous asset already delivers huge benefits for passengers by incorporating many innovative customer-oriented technologies and processes. For example, EIA was one of the first airports in Canada to successfully implement the Baggage Image and Weight Identification System (BIWIS), which captures image and weight information for each checked bag. This technology allows US-bound passengers to drop off checked bags before going through US Customs. BIWIS has also made way for the development of services such as US Quick Connect, which lets our transfer passengers connect to transborder flights without having to claim and recheck their baggage. Our operations are delivering positive results in passenger satisfaction, with EIA receiving its highest-ever surveyed overall satisfaction score. Our strategy is to gain a solid understanding of our customers and build on our existing strong performance in passenger satisfaction. This includes passenger facilitation, which seeks to streamline the passenger s journey throughout the airport, such as self-service technologies geared for faster check-in, security and customs processing 13

13 and baggage retrieval. We will also work to improve customer service, safety, security, and operations as part of a continuous customer-centric improvement program. Our focus will be on making improvements in the areas that our passengers care about the most: faster processing, better customer service, safer operations and greater transparency. Serving Our Community EIA s operations fulfill a community need for aviation services, and are a key economic driver to the region. A 2009 study showed that EIA creates 10,000 direct and indirect jobs, as part of an estimated economic impact of $1.6 billion. At the same time, we rely on the patronage of our passengers, the cooperation of our neighbours and partners, and reliable access to physical resources such as land, water, and energy. EIA s successful operations therefore depend on support from the communities we serve. This is reflected in EIA s core values, which include responsibly managing all of our assets to advance our region s environmental stewardship, social wellbeing, and economic prosperity. We understand that these are not competing interests; they are simply the mutually interdependent components of a larger system whose overall success depends on the health and vibrancy of each part. For example, our sponsorship of the 747 public transit bus service offers the opportunity to reduce environmental impact through shared public transportation, increase access to aviation services for people with disabilities, and directly support our own operations by making it easier for workers to get to EIA. Respecting the core values that we share with our community is not only appropriate for EIA as an organization mandated to act in the public good, we must address the interests of our community to be successful in our own endeavours. EIA continues to show leadership in respecting the environment by taking action to minimize our environmental impact. For example, we have built our terminal expansions and Central Tower with the intention of being LEED certified and LEED Silver, respectively. This includes using solar panels, recycling grey water, using energy and light efficient windows, and offering bottle refilling stations. We also treat contaminated storm water with an Engineered Wetland Treatment Facility, and manage wildlife activity to minimize wildlife collisions, among other environmental initiatives. EIA will continue to support the social well-being inof our community in many ways. We seek to consult and work cooperatively and respectfully with neighbours, stakeholders and partners. For example, we participate in relevant town hall meetings and public information sessions, and respond to noise complaints and other comments. We provide corporate donations and sponsorships, offer extensive in-kind assistance, and use our venue, our influence and our reputation to advance social programs, public safety, music, arts, and culture. We incorporate these considerations into our regular operations. For example, our passenger experience program includes supporting local artists and arts organizations by showcasing art and live music at EIA. Our new terminal was built to incorporate technologies and design specifications that improve access for people with disabilities. We will regularly review our community investment program to ensure its parameters continue to reflect our values, and to maximize its impact by leveraging it through partnerships. EDMONTON INTERNATIONAL AIRPORT

14 STRATEGIC PLAN We intend to build on our successes by increasing organizational transparency, increasing the scope of our current processes, and building internal capacity. We will create a sustainability report that identifies our organization s many initiatives and results. This will increase the visibility of our sustainability initiatives and inspire greater achievement both internally and externally with our partners and community. The increased transparency will also demonstrate our accountability for delivery on sustainability as an organizational priority. We will expand our current processes to include a full life-cycle asset management program, minimizing environmental impacts. We will increase sustainability literacy with the organization, and we will actively engage stakeholders to ensure the community s needs are reflected in EIA s activities. Developing Non-Aeronautical Initiatives Non-aeronautical initiatives support passenger market development by providing a superior passenger experience through desirable product and service offerings. With appealing amenities and brands they also help to attract and retain passengers, who drive demand for new air service. Given that a significant portion of our operating expenses are fixed, non-aeronautical development is a key opportunity to create revenue that can be reinvested to improve passenger experience and gain new air service. PARKING EIA has distinguished itself as a leader among Canadian airports in parking technology as the first airport in North America to introduce the industryleading online parking reservation system, Chauntry Parkspace. The Chauntry Parkspace system was installed in September 2010 with the opening of the new jetset parking product. In March 2013, the Chauntry system was further expanded to include Priority Valet, Easy Parkade and Value Park. The Chauntry system has played a key role in the successful creation of the signature jetset parking brand. jetset offers passengers conveniences such as full-service check-in and baggage drop for WestJet guests, and self-serve airline kiosks for guests travelling with other airlines. EIA has also shown strength in operating its parking efficiently and in creating customer value. CONCESSIONS Airport concessions play a vital role in creating a unique and superior airport experience while also generating non-aeronautical revenue for the airport. EIA has sought to provide a mix of homegrown Edmonton brands such as Cookies by George and Café Sorrentino s, as well as international standouts such as Heineken, Belgian Beer Café, and Plaza Premium Lounge. We have created value for passengers through creative use of space, such as the creation of a European Square (featuring European dining options). Our strategy for concessions will be to continue to drive forward with innovative service offerings and increased services to keep pace with the new demand that will be created by strong passenger growth. REAL ESTATE Edmonton Airports real estate business supports aviation-related development both directly and indirectly. Real estate supports our overall mission by driving regional economic growth. It also creates revenue that can be reinvested in aviation development. Real estate development also helps to drive aviation business by creating convenient space 15

15 for supporting services such as warehousing, distribution and freight forwarding. EIA has shown leadership in shaping its development towards an aerotropolis - a clearly definable airport-centred economic region. Dr. John Kasarda, Director of the Centre for Air Commerce and proponent of the aerotropolis/ airport city concept, has cited EIA as one of only two airports in Canada that are meet the criteria for an emerging as aerotropolis models. This leading-edge concept involves creating a one-stop shop by grouping related services together so that the combination attracts additional business. EIA s Cargo Village complex is a successful existing example. Our Cargo Village offers a comprehensive collection of services that appeal to shippers, including a dedicated air cargo apron, airside building facilities, road and land servicing, and a new Canada Border Service Agency (CBSA) facility. This successful development has allowed all of EIA s cargo operators (including FedEx, Cargojet, Purolator and DHL) to increase their operations at EIA significantly. We will seek to continue growing EIA s non-aeronautical business and transform the airport from an emerging aerotropolis to an operational aerotropolis. Our strategy will include pursuing a wide range of commercial and light industrial developments on airport lands. EIA has set aside considerable land with highway frontage that is serviced and will be developed into a premier shopping, recreation, office and hotel park (including the Outlet Collection at EIA). This approach builds on EIA s strengths, including possession of a significant amount of land for development that does not need to be set aside for future aeronautical use, and that is supported by excellent road access and proximity to North America s second-largest energy park. Managing Our Finances Edmonton International Airport s overarching mission to provide more flights to more places underlines every aspect of the airport s business, including our financial strategy. Our financial plan aligns expenses and capital allocation directly with the airport s air service goals. Our strategy is to support the delivery our organizational and business goals by managing processes effectively, assessing and mitigating risks, and regularly monitoring and reporting performance. This will allow us to maintain the flexibility to adapt and offset factors that could negatively influence our overall strategic plan. Investing in Our People Edmonton Airports has exceptional people, all focused on providing a world-class airport facility and superb passenger experience. Based on the guiding principles of investing in our talent, doing the right things right and EDMONTON INTERNATIONAL AIRPORT

16 STRATEGIC PLAN putting safety and security first, EA recognizes that employee engagement with our purpose and our strategy is essential to providing a first-rate airport experience to our customers. We also recognize that the right organizational design, with good decision-making and clear accountabilities, and excellent compensation and benefits must be there in order to foster that culture of employee engagement. Under our strategy, all employees will have an individual development plan, centered on personalized learning and growth objectives. In addition to helping foster a culture of employee engagement, we will implement an engagement survey to formally measure our progress, and adjust the program accordingly. 17

17 VILLENEUVE AIRPORT Since 2000, Edmonton Airports has owned and operated Villeneuve Airport (VA) for general aviation traffic, providing a home for small commercial, recreational and flight training aircraft. VA s role has now been redefined as being a strategic regional asset. Edmonton Airports Strategic Plan seeks to maximize VA s capacity to play an integral part in the Capital Region s transportation system as a safe, high-quality and attractive general aviation facility. Specifically, EA seeks to reduce VA s operating loss, grow general aviation traffic, increase non-aeronautical revenue and improve relationships between the airport s owners and operators and other key regional stakeholders. Edmonton Airports has already put nearly $7 million in Capital Investment in to Villeneuve since 2000 and will put in another $17 million over the next five years. In support of the social and business needs of the Cap ital Region, VA will be operated and developed as an integral component of the Region s transportation in frastructure. This will be achieved through responsible investment, provision of quality services, efficient operations, pru dent financial management, sustainable processes, and by developing closer relationships with business and the surrounding communities. Villeneuve Airport s strengths include its location within the Capital Region and its proximity to Edmonton, its abundance of available land and lack of environmental constraints and its low fees and charges structure. Additionally, the airport has local NAV Canada Tower services, two runways (one 3,500-by-75 feet and one 5,000-by- 75-feet) and an Instrument Landing System (ILS). Edmonton Airports plans to leverage these assets by way of pursuing the following opportunities: Positioning Villeneuve Airport as an alternate/contingency site for key services such as air ambulance and Medevac flights Increasing small aircraft operations in and out of Villeneuve Airport Developing a new flight training centre Introducing full-service fixed-based operations (FBO) and an enhanced maintenance and repair organization (MRO) Increasing hangar capacity Developing new charter services based out of Villeneuve Airport for resource industry clients Developing a groundside industrial park Conduct public relations aimed at raising the profile of the airport (e.g. fly-ins and air shows) EDMONTON INTERNATIONAL AIRPORT

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